December 23, 2020
Public-private partnership as a way to develop infrastructure
In recent years, the need for public-private partnership (PPP) has arisen in areas where the state is responsible for public facilities: transport, utilities, social infrastructure, cultural objects, historical and architectural monuments, as well as repair, reconstruction and maintenance of public facilities. use, cleaning of territories, housing and communal services, education, health care and much more.
Thus, PPP provides an opportunity for government agencies to interact more effectively on infrastructure development by sharing risks and responsibilities compared to traditional public procurement.
It should be borne in mind that PPP, in most projects, is a medium and long-term interaction between the state and business. Main features:
– The parties to PPP are the state and private business;
– the interaction of the parties is fixed on an official, legal basis;
– the interaction of the parties is of an equal nature;
– PPP has a clearly expressed public, public orientation;
– in the process of implementing projects on the basis of PPP, the resources and contributions of the parties are consolidated;
– financial risks and costs, as well as the results achieved, are distributed between the parties in predetermined proportions.
In PPP projects, private business undertakes obligations to develop, build, finance and manage facilities in accordance with the parameters and standards set by the state. In return, the private sector receives payments from the state, the amount of which depends on the results achieved (services provided). In a number of projects, this payment (or part of it) will be obtained from the proceeds from the commercial operation of the facility.
Despite the merits of PPPs in practice, problems remain associated with complex, complex agreements / contracts involving multiple parties with different interests / motivations and incentives, necessitating better overall governance.
2. Legislation on public-private partnership
The legislation of the Republic of Kazakhstan in the field of public-private partnership is based on the Constitution of the Republic of Kazakhstan and consists of:
– The Civil Code of the Republic of Kazakhstan (General Part), adopted by the Supreme Council of the Republic of Kazakhstan on December 27, 1994, the Civil Code of the Republic of Kazakhstan (Special Part) dated July 1, 1999, No. 409-I;
– Code of the Republic of Kazakhstan dated December 25, 2017 No. 120-VI “On taxes and other obligatory payments to the budget (Tax Code)”;
– Code of the Republic of Kazakhstan dated December 27, 2017 No. 125-VI “On Subsoil and Subsoil Use”;
– Code of the Republic of Kazakhstan dated October 29, 2015 No. 375-V “Entrepreneurial Code of the Republic of Kazakhstan”;
– Law of the Republic of Kazakhstan dated October 31, 2015 No. 379-V “On public-private partnership”;
– The Law of the Republic of Kazakhstan dated July 7, 2006 No. 167-III “On Concessions”;
– Decree of the Government of the Republic of Kazakhstan dated November 6, 2017 No. 710 “On approval of the list of objects not subject to transfer for the implementation of public-private partnership, including concession”;
– Order of the acting Minister of National Economy of the Republic of Kazakhstan dated November 25, 2015 No. 725 “On some issues of planning and implementation of public-private partnership projects”;
– Order of the Prime Minister of the Republic of Kazakhstan dated March 9, 2016 No. 15-r “On approval of the Action Plan for the implementation of public-private partnership projects by industry and region for 2016 – 2018 with the expansion of mechanisms for the application of public-private partnership and private investment.”
3. Ways of implementing public-private partnership
Public-private partnership by the way of implementation is subdivided into institutional and contractual.
Institutional public-private partnership is implemented by a public-private partnership company in accordance with a public-private partnership agreement.
A public-private partnership company operates in the organizational and legal form of a joint-stock company or a limited liability partnership, in which the public partner and the private partner collectively hold one hundred percent of voting shares (participatory interest in the authorized capital).
If the public partner and the private partner intend to create a public-private partnership company in the organizational and legal form of a limited liability partnership, then they have the right to conclude a public-private partnership agreement within the framework of the founding agreement of the limited liability partnership.
If the public partner and the private partner intend to create a public-private partnership company in the organizational and legal form of a joint-stock company, the relationship between the public partner and the private partner is governed by a public-private partnership agreement.
In other cases, public-private partnership is carried out according to the method of contractual public-private partnership.
Contractual public-private partnership is implemented through the conclusion of a public-private partnership agreement, including in the following forms:
2) trust management of state property;
3) property lease (lease) of state property;
5) contracts concluded for the development of technology, production of a prototype, pilot industrial testing and small-scale production;
6) life cycle contract;
7) service contract;
8) other agreements corresponding to the characteristics of public-private partnership.
4. Forms of participation in public-private partnership of state bodies
State support measures:
1) guarantees of the state for infrastructure bonds;
2) government guarantees for loans raised to finance public-private partnership projects;
3) transfer of exclusive rights to intellectual property objects owned by the state;
4) provision of in-kind grants in accordance with the legislation of the Republic of Kazakhstan;
5) co-financing of public-private partnership projects;
6) guarantees of consumption by the state of a certain volume of goods, works and services produced during the implementation of a public-private partnership project.
At the same time, the total amount of co-financing of public-private partnership projects and compensation for investment costs aimed at reimbursing the costs associated with the creation (reconstruction) of a public-private partnership object cannot exceed the cost of creating and (or) reconstruction of a public-private partnership object.
5. Completed projects in Kazakhstan based on PPP
According to the Kazakhstan Center for Public-Private Partnership, as of December 4, 2020, the total number of projects is 1354, of which 293 are at the competition stage, 829 have been implemented, the total amount of attracted and planned investments is 1,179.0 billion tenge.
For example, among the implemented or planned projects are the following projects:
- in the field of transport and infrastructure, the current project “Construction and operation of the highway” Big Almaty ring road “, construction date from May 31, 2018 to December 31, 2022;
- in the field of transport and infrastructure, the current project “Creation and operation of the Nur Zholy automobile checkpoint and operation of the transport and logistics center on the section of the Almaty-Khorgos highway of the Western Europe – Western China international transit corridor”, construction date from December 26, 2017 until June 22, 2018;
- in the field of education, there is a project “Creation, implementation and maintenance of the automated information system of electronic journals and diaries” Kandelik “; the period of creation is from January 01, 2016 to July 31, 2016;
- in the field of health and social services “Construction of a multidisciplinary hospital for 630 beds in the city of Turkestan 2020-2023”;
- in the field of information and communication “Providing broadband access to rural settlements of the Republic of Kazakhstan using fiber-optic communication lines technology” 2018-2020.